A Social Capital Perspective on the Role of Human Resource Practice in Intra-Organisational Knowlege...

8/2/2019 A Social Capital Perspective on the Role of Human Resource Practice in Intra-Organisational Knowlege Sharing 2004

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A Social Capital Perspective on theRole of Human Resource Practicesin Intra-organisational KnowledgeSharing

Angelos AlexopoulosKathy Monks


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A Social Capital Perspective on the Role of

Human Resource Practices in Intra-organisational Knowledge Sharing

ANGELOS ALEXOPOULOS

KATHY MONKS

ABSTRACT

While a growing body of HRM research has underscored the primacy of peoplemanagement issues within the broader KM agenda, little progress has been made in

understanding the interrelationships between HR practices and intra-organisational

knowledge sharing. The aim of this paper is to contribute theoretically to the debate

on the emergent role of HR practices in intra-organisational knowledge sharing within

knowledge-intensive firms. Viewing knowledge as a socially constructed

phenomenon and the knowledge-intensive firm as a distributed knowledge system, the

paper draws upon social capital theory and places to the forefront of the discussion the

catalytic although overlooked role of organisational social structure (in the form of

either social capital or social liability) in mediating the relationship between HRM

and intra-organisational knowledge sharing. The paper suggests that employees

ability, motivation, and opportunity to share their human capital can be viewed as

both the cause and the outcome of the cognitive, relational, and structural dimensions

of social capital embedded in an organisations formal as well as informal social

architecture. The paper seeks to shed light into whether and how HR practices

influence the creation and sustenance of social capital, and by extension, knowledge

workers' decision to share what they know. Hence, understanding the dynamics of

organisational social capital is considered as prerequisite for understanding the

intervening role of HR practices in the knowledge sharing process The paper places


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INTRODUCTION

While knowledge has traditionally been regarded by economists and organisation

theorists as a key engine of production (Marshall, 1890) and the basis for individual

and organisational competence (Hayek, 1945; Penrose, 1959), the idea of knowledge

management (KM) has enjoyed widespread popularity in the academic and business

press only in recent years. However, despite its rapid development, most of the KM

discourse has tended to be information technology (IT) driven, and has thus failed to

shed light into the soft, but at least equally important, issue of managing knowledge

workers (Robertson & OMalley Hammersley, 2000; Scarbrough & Swan, 1999), whocan be viewed as the ultimate knowledge creators and bearers (Oltra, 2003: 2).

Despite the realisation that people management issues play a critical role in

knowledge leveraging processes, HRM theory has paid little attention to the HR

implications of managing knowledge assets towards achieving knowledge sharing

optimisation (Hislop, 2003; Scarbrough & Swan, 1999; Storey & Quintas, 2001).

The emergence of the knowledge-intensive firm (KIF) (Alvesson, 2000; Blackler,

1995) as a key player in the knowledge economy signals a significant change from

rigid organisational structures to more complex and fluid forms whose boundaries can

be no longer defined in terms of land and/or capital ownership criteria, but rather in

terms of transferability of useful organisational knowledge. Knowledge sharing

becomes crucial for the survival and success of KIFs and this requires a rethinking of

the employment relationship (Hibbard & Carrillo, 1996; Robertson & OMalley

Hammersley, 2000). There is, therefore, a need to re-examine the appropriateness ofconventional human resources management (HRM) practices in terms of their

compatibility with KIFs strategic priorities along with the changing needs, interests,

and values of knowledge workers (Keegan, 1998; Ruggles, 1998).

This paper contributes to the debate on HRs role in managing organisational

knowledge by providing a social capital perspective on the HR implications of intra-

organisational knowledge sharing. Specifically, drawing upon HRM theory, social

capital theory, and KM theory, it develops a conceptual model of the

interrelationships between HR practices and social capital dynamics, and their

combined effect on employees ability, motivation, and opportunity to share

knowledge. Thus, it seeks to be a fruitful counterpoint to the existing body of research

by placing the HR dialogue on human capital in the social context of how knowledge


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KNOWLEDGE SHARING AND SOCIAL CAPITAL: THEORETICAL

FRAMEWORK AND ANALYSIS

Knowledge Sharing

Since Kogut & Zander (1992) argued that a firms ability to transfer knowledge is its

raison d'tre, research on knowledge sharing has become one of the most promising

areas of research in KM. Knowledge sharing can be defined as a reciprocal process

of understanding, integrating and sense-making, which is embedded in the activities

of the organisation (Willem & Scarbrough, 2002: 4). Based on Storey (2001),MacNeil (2003: 299) states that knowledge sharing occurs when people who share a

common purpose and experience similar problems come together to exchange ideas

and information.

A KIFs competitive business model is based on deploying its knowledge assets.

It thus needs to recognize not only the variety of forms of knowledge and understand

their properties, but most importantly to develop the means by which knowledge can

be disseminated (Hunter et al., 2002). Szulanski (2000: 10) suggests that mere

possession of potentially valuable knowledge somewhere within an organization does

not necessarily mean that other parts of the organization benefit from this knowledge.

Knowledge sharing is considered as a crucial KM process within organisational

settings characterised by high division of labour, as it facilitates the integration and

regeneration of otherwise fragmented, specialised, and asymmetrically distributed

knowledge, thus making feasible the production of complex and innovative productsand services (Boer et al., 2002). Knowledge sharing is perceived as fostering

individual and organisational learning, and also promoting employee cooperation

(Boer & Berends, 2003; Moorman & Miner, 1997).

Although the benefits of the knowledge transfer process have been documented in

both inter-organisational (Dyer & Nobeoka, 2000) and intra-organisational levels

(Baum & Ingram, 1998; Epple et al., 1996), its optimisation has proven a difficult

challenge (Argote etal., 2003; Szulanski, 1996). Many organisations are faced with

knowledge sharing problems (Gupta & Govindarajan, 2000; Michailova & Husted,

2003; Ruggles, 1998; von Hippel, 1994) that cannot be overcome by investing solely

in information and communication technologies (ICTs) (Swan et al., 2000). In

general, knowledge sharing problems can be classified into four main categories:


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complicated social process, than just a technical, IT regulated activity. It is mediated

by a wide range of complex, highly contextual, and therefore difficult to control

factors embodied in an organisations social architecture (Mueller, 1996).

A Social Capital Approach to Knowledge Sharing

While the idea of social capital has a long history in social, economic, and political

sciences, recently it has also attracted the attention of organisation and management

theorists (Adler & Kwon, 2002; Baker, 2000; Cohen & Prusak, 2001; Leana & van

Buren III, 1999; Lesser, 2000; Nahapiet & Ghoshal, 1998). This interest can beattributed to the rise of the network economy and the emergence of KIFs (Lesser,

2000). As Cohen & Prusak (2001: 16) suggest, [t]he size and intricacy of

organizations, the proliferation of critical information, and the increasing complexity

of [work] tasks make connection and cooperation social capital increasingly

important.

Viewing organisational knowledge as a socially constructed phenomenon (Berger

& Luckmann, 1967), and the KIF as a distributed knowledge system (Tsoukas, 1996),

reinforces the perception of intra-firm knowledge sharing as a collective action

process located in complex and collaborative social interactions. Accordingly, the role

of social capital is considered as vital. Social capital can be described as an attribute

or asset of work organisations (Leana & van Buren III, 1999), and it is defined as the

sum of the actual and potential resources embedded within, available in, and derived

from the network of relationships possessed by an individual or social unit (Nahapiet

& Ghoshal, 1998: 243).

Social capital is suggested to be a valuable organisational resource as it facilitates

the interactions among organisational members that are necessary for successful

collective action (Leana & van Buren III, 1999). Furthermore, according to Nahapiet

& Ghoshal (1998), social relationships and the social capital therein can have an

important influence on the development of intellectual capital. The linkages between

social capital and organizational knowledge are best illustrated in Nahapiet &Ghoshals (1998) theoretical model. According to this, social capital consists of three

mutually reinforced dimensions: structural, relational, and cognitive social capital.

Structural social capital, viewing social relationships through the lenses of social

network theory (e.g. Wasserman & Faust, 1994), refers to the pattern, configuration,


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share a vision will be more likely to become partners sharing or exchanging their

resources (Tsai & Ghoshal, 1998: 467).

The interlinks among the three dimensions of social capital, and their combined

effect on resource exchange and value creation have been empirically examined in

Tsai & Ghoshals (1998) study of a large multi-unit electronics organisation in the

US. Specifically, this study shows that both structural and cognitive social capital had

a significant positive impact on the relational social capital which, in turn, was found

to be associated with resource exchange and combination resulting in increased

product innovation.The results of the above study suggest that social capital can act as a mechanism

for facilitating knowledge sharing by: (1) constructing shared language, and a shared

vision through which employees are able to share their knowledge, (2) cultivating

trust and trustworthiness that can motivate employees not to hoard their knowledge,

and (3) providing employees with the opportunity to detect, communicate and

exchange knowledge through the creation of new and/or reconfiguration of existing

network ties (both within and outside the firm).Based on the familiar tripartite A-M-O (ability-motivation-opportunity)

framework (Boxall & Purcell, 2003; Campbell et al., 1993), a first theoretical

proposition can be formulated as follows:

Proposition 1: The cognitive, relational, and structural dimensions of social

capital are likely to have a combined effect on employees ability, motivation and

opportunity to share their knowledge, respectively.

It is suggested though that the relationship between social capital and employees A-

M-O to share knowledge is reciprocal. Consequently, employees high propensity to

share their knowledge can lead to higher levels of social capital. Thus, social capital

can be viewed as both a cause and outcome of employees A-M-O to share their

human capital.

THE ROLE OF HUMAN RESOURCE PRACTICES IN KNOWLEDGE

SHARING


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more in its intellectual base than its hard assets. [V]irtually all public and private

enterprises including most successful corporations are becoming dominantly

repositories and coordinators of intellect. Hence, it can be argued that KIFs

competitive advantage potential resides in the development of its intellectual capital.

The latter represents a valuable resource and a capability for action based on

knowledge and knowing (Nahapiet & Ghosal, 1998: 245) and can be defined as a

combination of human and social capital (McElroy, 2002).

The realisation that the combination of high-quality human capital and high-

quality social capital is key to competitive advantage in the knowledge economy(Lengnick-Hall & Lengnick-Hall, 2003: 62) can represent a significant departure from

a conventional, individualistic theorising of HRM, to more interactionist perspectives

(Schneider, 1983) that acknowledge the importance of social relationships and social

capital therein.

Based on the above, it is suggested that KIFs can gain intellectual capital

advantage by combining their human capital advantage (i.e., employees capacity to

acquire and apply effectively new knowledge, capabilities and skills) and socialcapital advantages (i.e., the quality of social relationships enabling employees to

communicate useful knowledge).

Hence, this paper, proposes the much neglected at least by the traditional

positivist HRM tradition inclusion of social capital as a fundamental factor into the

HR equation. Specifically, it suggests that HR practices should aim at contributing to

the simultaneous development of human and social capital advantages, which in

combination constitute a KIFs intellectual capital advantage (see Figure 1).

[Insert Figure 1 about here]

According to Lengnick-Hall & Lengnick Hall (2002), this can be best accomplished if

HR professionals adopt four new interdependent and mutually reinforced roles: (1)

human capital steward (assisting individuals to develop their knowledge, skills, andcapabilities); (2) knowledge facilitator (coaching, resource gathering, spotting

personal mastery, and providing constructive feedback to employees); (3) relationship

builder (helping individuals to build a strong web of relationships); and (4) rapid

deployment specialist (drawing on human and social capital to contribute to firms


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fundamental ways from investing in human capital (Coleman, 1988). The following

section focuses on the HR implications of managing social capital towards achieving

intra-organisational knowledge sharing.

HR Practices, Social capital and Knowledge Sharing: Towards a Conceptual

Model

A recent stream of research has begun to throw new light on the HR issues of

managing knowledge. This, while varying in scope, level of analysis, and methods

used, can be classified into three main clusters. The first takes a paternalistic approachand views HRs role as just intervening and exogenous to the actual process of

knowledge sharing (Michailova & Husted, 2003; Soliman & Spooner, 2000). The

second, while being consistent with agency theory, adopts a more integrated approach

by placing emphasis on more strategic features of HRM and their impact on KM

outcomes (Oltra, 2003; Yahya & Goh, 2002).

Finally, there is a small amount of research exploring social capitals implications

for HR practice (Baker, 2000; Brass & Labianca, 1999; Lengnick-Hall & LengnickHall, 2002). For example, Baker (2000) identifies a set of ten HR best practices that

can build organizational social capital (see Table 1).

[Insert Table 1 about here]

Knowledge sharing phenomena can be better understood by examining whether and

how employment practices impact on employees ability, motivation, and opportunity

to engage in knowledge sharing activities which in turn depend upon the cognitive,

relational, and structural social capital.

Not surprisingly, HRM research offers its biggest contribution to the motivation

element of knowledge sharing. Critical to this appears to be the extent to which

knowledge sharing is embedded in reward and appraisal systems (Hansen et al.,

1999). It is agued that the relative effectiveness of a reward system depends on thetype of employees engaged in knowledge exchange as well as the type of knowledge.

Osterloh & Frey (2000) suggest that firms can manage motivation better than the

market (which relies only on relative prices) by choosing an optimal combination of

both intrinsic and extrinsic rewards suitable for different types of employee groups,


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positive effect on employees knowledge sharing behaviours (Patch et al., 2000).

Finally, Robertson & OMalley Hammmersley (2000) underline the important role of

job satisfaction and fulfilment of employees expectations in encouraging the sharing

of their knowledge.

In regard to the structural social capitals implications for HRM, Brass &

Labianca (1999) identify five areas including: recruitment and selection (based on

utilising the personal networks of employees for attracting and hiring job candidates);

socialisation (early connections in the organisational network can lead to enhanced

social capital); training (similar training experiences can contribute on buildingconnections across diverse and heterogeneous groups in anticipation of the future

formation of cross-functional teams); performance management (performance can be

improved when the network structure matches the information processing

requirements); and career development (mentoring plays an important role as strong

connections to a mentor can lead to increased access to the organisational network

resulting in career advancement).

Finally, HR practices can contribute to the formation of cognitive social capitalnecessary for knowledge sharing by: introducing cultural fit criteria in the

recruitment and selection processes that can ensure that prospective employees are

capable of demonstrating a knowledge sharing potential willingness, cross-functional

teamworking skills, and collaborative spirit (Robertson & OMalley Hammmersley,

2000; Swart & Kinnie, 2003). Other HR initiatives include the development of self-

development programmes, and self-management teamworking, and also the creation

of a cultural environment characterised by informality, egalitarianism, and active

employee involvement in decision making (Robertson & OMalley Hammmersley,

2000).

Hence, a second theoretical proposition can be formulated as follows:

Proposition 2: Social capital is likely to mediate the impact of HR practices onemployees ability, motivation, and opportunity to share their knowledge.

Furthermore, it is suggested that HR practices role in the knowledge sharing process

appears to be twofold. Specifically, HR practices can influence employees A-M-O to


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[Insert Figure 2 about here]

According to this conceptual model, intra-organisational knowledge sharing is viewed

through the lens of employees A-M-O to engage in knowledge sharing activities. The

A-M-O framework can be seen as a robust analytical tool as it places individuals

abilities, motivation and opportunities to succeed in a specific context (Boxall &

Purcell, 2003). Campbell et al. (1993) define ability as a combination of declarative

knowledge (including facts, principles, goals, and self-knowledge) and procedural

knowledge and skill (including cognitive skills). Similarly, in this model, ability (toshare knowledge) is both an antecedent to and a result of cognitive social capital.

Motivation is determined by the individuals choice to perform, the level of effort, and

the persistence of that effort (ibid). This model identifies trust and trustworthiness as

major determinants of the individuals choice to get involved in knowledge sharing

activities.

It is argued, though, that even highly capable and motivated employees cannot

perform successfully if they lack the opportunity to access useful channels and utilisetheir resources (Boxall & Purcell, 2003). However, the role of opportunity is not

clearly acknowledged (ibid: 137). In this model, employees opportunity to share

their knowledge is suggested to be heavily influenced by the structural characteristics

of the formal as well as informal networks of social interactions taking place within

(and outside) the firm.

Hence, the conceptual model adds to the understanding of the knowledge sharing

process, as it provides an integrated theoretical framework, according to which,

employees abilities, motivation and opportunities to share their knowledge are

dialectically interlinked with the cognitive, relational, and structural social capital

embedded in, and derived from the organisations social context. This is a novel

approach, as the vast majority of studies have failed to incorporate all the three

dimensions of social capital into their analyses of knowledge sharing in organisations.

In addition, this model contributes to an alternative theorising of HRs role in themanagement of organisational knowledge. Specifically, it embraces a social capital

perspective, stressing the need for examining empirically the largely overlooked

impact of HR practices on the structure, content, and value of social relationships

within the KIF. This suggests a process-based approach to HRM (Swart & Kinnie,


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viewed as an important multi-faceted factor that is likely to mediate the impact of HR

practices on the level and quality of knowledge sharing taking place within

knowledge intensive business environments.

It would be simplistic, though, to omit from the analysis the problems with the

concept of social capital, by implying that it is a panacea for overcoming knowledge

sharing inefficiencies. Both theoretical (Adler & Kwon, 2002; Brass & Labianca,

1999; Leana & van Buren III, 1999), and empirical analyses (Edelman et al., 2004)

have pointed out the dark side of social capital. Specifically, there are costs

associated with maintaining ongoing relationships and norms, and related to themaintenance of slack resources (for socialization of new organisational members)

(Leana & van Buren III, 1999). There are also pitfalls of unrealised innovation and

resistance to change caused by established relationships and strong norms keeping

employees embedded in regularities, not willing to internalise new information and

knowledge (Edelman et al., 2004). It is suggested that the social context in which

social capital is created and utilized has a significant impact on its form and usage

(ibid: S67).This addresses further challenges to HRM concerning the design and

implementation of HR practices that can facilitate social capital advantage. The main

difficulty derives from the evolving nature of social capital. Specifically, in the long-

term, social capital tends toward strong ties, resilient trust, and overlapping

component knowledge (Morris et al., 2002). Brass & Labianca (1999) recommend

that research on social capital can benefit from including the consideration of the

negative side of social capital, namely social liability, which destroys trust and norms,

and also prevents information and knowledge sharing. Understanding the dynamics of

organisational social capital is therefore considered as an essential prerequisite for

understanding and explaining the role of HR practices in its sustenance and its impact

on knowledge sharing.

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TABLES AND FIGURES

Table 1: HR best practices that build organisational social capital

HR Practices

Faculty Design and Location: open offices, absence of physical barriers, co-location, water-cooler strategies

Hiring: Hire networks and not just on the basis of what people know

Education and Training: Introducing cross-functional training

Multidisciplinary teams: Promoting cross-functional teamworking

Rotation Programs: Acting as natural vehicles for building networks thattransfer knowledge across organisational boundaries and develop a global

mindset.

Incentive Systems: Combining individual and collective rewards; rewardingfor knowledge sharing

Communities of Practice (CoP): Fostering, nurturing, and investing in thedevelopment of CoP. A CoP gives employees a home

Management Networks: Involving people who are drawn from acrosscompanys functions, business units and geography, and from different levels

in hierarchy.

External Networks: Developing networks of alliances with competitors,customers and suppliers.

Source: Baker (2000: 182-192)


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Figure 1: HRs role in building intellectual capital advantage

HR Manager as:

Source: Lengnick-Hall & Lengnick Hall (2002)

Human

Capital

Steward

SocialCapital

Advantage

Human

Capital

Advantage

Intellectual

Capital

Advantage

Rapid

Deployment

Specialist

Knowledge

Facilitator

RelationshipBuilder

HRs Role

in Building

Intellectual

CapitalAdvantage


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THE LEARNING, INNOVATION AND KNOWLEDGE (LINK) RESEARCH CENTRE WORKING PAPER SERIES

WP 01-04http://www.link.dcu.ie/publications/workingpaperseries/ 2004, LInK, Angelos Alexopoulos and Kathy Monks

Contact: [email protected]

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Figure 2: A social capital perspective of the role of HR practices in intra-organisational knowledge sharing

Cognitive SC-Shared Language

& Codes

-Shared Vision

Relational SC-Trust &

Trustworthiness

Structural SC

-Network ties

HR Practices:

-Recruitment & Selection

-Training & Development

-Socialisation-Mentoring

-Performance Management

-Career Development

-Performance Appraisal-Reward Management

-Teamworking-Employee Involvement in

Decision Making

-Self-Management Programs

-Management Networks

-Communities of Practice

-Faculty Design & Location

Intra-

OrganisationalKnowledge

Sharing

Ability toShare

Knowledge

Motivation toShare

Knowledge

Opportunity to

ShareKnowledge

HRM Social Capital

Employees

A-M-O to

Share KnowledgeOutcome

A Social Capital Perspective on the Role of Human Resource Practice in Intra-Organisational Knowlege...

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